The Social Security Administration (SSA) is likely to increase benefits in 2025, boosting the maximum payout for retirees. As of January 2024, the highest monthly retirement benefit is $4,873, translating to $58,476 per year.
With the upcoming Cost of Living Adjustment (COLA) expected in 2025, retirees could see an even higher annual income. However, qualifying for this amount requires meeting specific criteria. Here’s what you need to know.
$58,476 Per Year From Social Security in 2025 Requirements
To maximize your Social Security benefits and receive more than $58,476 annually, you need to meet four key requirements. Each one plays a crucial role in determining your monthly benefit, but you must meet all four to qualify for the highest payout.
1. Delay Retirement Until Age 70
The most effective way to maximize your Social Security benefits is by waiting until age 70 to file. For each year you delay benefits past your Full Retirement Age (FRA), your monthly payment increases by approximately 8%, resulting in a 24% boost if you wait until 70.
2. Work in a Job Covered by Social Security
Not all jobs are covered by Social Security. To ensure your work qualifies, you must be employed in a position where Social Security taxes are deducted from your paycheck.
Some government and nonprofit jobs may not be covered, so it’s essential to verify your employment status.
3. Work for a Minimum of 35 Years
Your Social Security benefits are calculated based on your highest 35 years of earnings. If you have fewer than 35 years of work history, the missing years will count as zeroes, which will lower your average and reduce your monthly benefit.
To avoid this, ensure you have at least 35 years of work, and ideally, try to have high-earning years during this period.
4. Earn the Contribution and Benefit Base (Taxable Maximum) for 35 Years
The contribution and benefit base, also known as the taxable maximum, is the annual income limit on which you pay Social Security taxes. For 2024, this limit is $168,600, up from $160,200 in 2023.
Consistently earning at or above this limit throughout your 35-year career is essential to receiving the maximum Social Security benefit.
Understanding the Contribution and Benefit Base
The taxable maximum is the highest amount of income subject to Social Security taxes each year. Once you reach this threshold, you stop paying Social Security taxes for the rest of that year.
To maximize your benefits, you should aim to earn at or near this limit for 35 years, ensuring that your Social Security contributions are as high as possible.
How Social Security Rewards Delaying Retirement
The SSA incentivizes delayed retirement by offering a substantial increase in benefits for those who wait until age 70 to file.
By delaying beyond your FRA (usually 66 or 67), you can receive up to 24% more each month compared to filing at FRA.
On the other hand, filing early at age 62 would significantly reduce your benefit, potentially bringing it down to $2,710 per month.
Filing at your FRA allows you to collect 100% of your benefits, which is ideal if you prefer not to delay retirement or face health issues that make waiting until 70 difficult.
Increasing Your Earnings to Boost Benefits
Even if you haven’t consistently earned the taxable maximum throughout your career, there are still ways to improve your benefit.
Consider pursuing higher-paying jobs or working additional years to replace lower-earning years in your 35-year calculation.
Since the taxable maximum increases annually with COLA, staying informed about these changes can help you maximize your Social Security benefits.
FAQs
How can I get over $58,476 in Social Security benefits?
You need to meet four key requirements: delay retirement until age 70, work in a job covered by Social Security, work for at least 35 years, and earn the taxable maximum for those 35 years.
What is the taxable maximum for Social Security in 2024?
The taxable maximum is $168,600 in 2024.
Why should I wait until age 70 to claim Social Security benefits?
Waiting until 70 increases your monthly benefit by 24%, maximizing your payout.
What happens if I file for Social Security at age 62?
Filing early at 62 reduces your benefit significantly, potentially lowering it to $2,710 per month.
How does working for 35 years impact my Social Security benefit?
Your benefit is calculated based on your highest 35 years of earnings. Missing years count as zeroes, lowering your average and reducing your benefit.
